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Can Roku Avoid TiVo's Curse?

Roku has no lack of competitors that let consumers stream video and music content from the likes of Netflix, HBO GO and Hulu on their TVs. The most notable among them is Apple TV, which has the formidable selling point of allowing people to display content from their iPhones and iPads on their TV sets via its AirPlay functionality.

Display ads from Roku's campaign

Microsoft is positioning its latest Xbox coming later this month -- Xbox One -- as a media device as much as a gaming console.

Google is another household name brand that's dipped a toe into the water, introducing its video-streaming dongle, Chromecast, in July. And Amazon -- which already has a streaming video service -- is reportedly also developing its own set-top box.

But Roku is looking to make the breadth of its content library the key differentiator, according to Matthew Anderson, the company's chief marketing officer. The concept of streaming is now well understood by consumers, so Roku is making the case that it's got a superior product instead of positioning itself as a novelty.

"We want people to say, 'Gosh, I want to stream, but what's the difference between what I can stream between the options, and Roku's really the best," Mr. Anderson said.

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Roku need not look far to see the danger. TiVo once had the best brand and best technology in the space, but was reduced to also-ran status by a glut of good-enough DVRs distributed by cable and satellite operators.

But a recent report by market research firm Parks Associates suggested that Roku actually has a leg up in the U.S. Thirty-seven percent of 10,000 respondents who already had a streaming-video device said they primarily used Roku, compared to 24% who said they mostly used Apple TV.

Sales-focused campaign
Roku's new campaign has outdoor and cinema distribution points, but the lion's share of investment will go to digital, including video ads on streaming networks like Vevo, Hulu and YouTube. (The notion is that there are millions of people who are streaming on other devices, and they need a push to start doing it to their largest screen, Mr. Anderson said.)

It's the first work from the company's new agency, Sausalito, Calif.-based Butler, Shine, Stern & Partners.

By itself, theholiday campaign represents a bigger investment in marketing than Roku made in all of 2012, when it spent $10 million. While last year's holiday campaign was focused on brand awareness with most of the budget allotted to radio and outdoor, sales are the focus this year.

"I felt that we should be focused much deeper in the funnel," Mr. Anderson said.

Awareness of the streaming category has grown, largely due to acclaim heaped on the Netflix original series "House of Cards" and "Orange Is the New Black," as well as publicity around new competitors like Google's Chromecast.

While targeted display ads will pound out the message that Roku has more to offer in terms of content ("More original shows than any other streaming content" is the copy for one such ad), the video ads will feature a 50-something Ukrainian character named Moxkat Grvida who urges people to buy themselves a Roku for the holidays.

~ ~ ~CORRECTION: A previous version of this story stated that one of the channels Roku will run video ads on is Vimeo; it's actually Vevo. And Roku's April announcement that it had sold 5 million players applied only to U.S. sales. We regret the errors.